Question
8. Will improving customer service result in higher stock prices for the companies providing the better service? When a company's satisfaction score has improved over
8. Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (75.7), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from the American Customer Satisfaction Index. Assume that the scores are based on a poll of 60 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 6 points in each case.
Company | Year 1 | Year 2 |
Rite Aid | 73 | 76 |
Expedia | 75 | 77 |
J.C. Penney | 77 | 78 |
d) When conducting a hypothesis test with the values given for the standard deviation, sample size, and , how large must the increase from year 1 to year 2 be for it to be statistically significant? The answer is 1.80.
e) Use the result of part (d) to state whether the increase for J.C. Penney from year 1 to year 2 is statistically significant.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started